So many counterfeiters, so little time

Target acquisition is the detection, identification, and location of a target in sufficient detail to permit the effective employment of lethal and non-lethal means, according to Wikimedia. [Note that while some brand owners may have occasional fleeting thoughts of using lethal force against counterfeiters, this article will only discuss the best practices to identify your brand’s appropriate target so that non-lethal force can be exerted to protect your brand.]

What you may ask, does target acquisition have to do with protecting your brand? Just about everything if your company, like most, has limited resources to fight the reality of global counterfeits. Focusing your efforts on the “big fish” can be the difference between a successful anti-counterfeit program and one that doesn’t add value and quickly becomes a drain on your budget. The military and law enforcement have long gathered and analyzed intelligence to acquire the “right” targets. Your brand can too.

But the collection of data all by itself is not enough. The information you collect from both inside and outside your company, including information received from Customs, online monitoring, test buys and cease and desist letters, should be analyzed to determine how best to proceed to effectively decrease the counterfeit market for your brand and allow the effective deployment of precious resources.

The United States Commerce Department estimates that online sales in 2013 were $262.5 billion in the U.S. alone. It is, therefore, not surprising that a simple eBay or Amazon search may reveal hundreds or even thousands of purveyors of your products. Figuring out which sellers are selling counterfeit can be a herculean task. Any successful effort funnels your data collection and analysis through the prism of an effective criminal referral and civil enforcement program and allows you to focus your efforts on the top targets: the manufacturers, the distributors and the large-scale sellers of counterfeit products. Counterfeiters are businessmen too, and if they face jail time or their transactions costs are elevated, they are likely to move on to seek profits elsewhere.

An analysis of the data from the following is crucial to effectively accomplish target acquisition and will inform your criminal referral and civil enforcement program:

A U.S. and/or international customs program

An effective online monitoring program

Test buys

Cease and desist letters

Data can come from a myriad of sources. However, the information gathered from Customs and your online monitoring program provides a good starting point as to the universe of counterfeiters profiting from your brand’s intellectual property. Customs seizures will contain contact information for importers and exporters. Some online marketplaces will provide personal information for sellers against whom takedown notices have been filed. Return address information and or shipment information will often be available on products purchased as test buys. An analysis of the data you collect oftentimes reveals that a small handful of sources are behind multiple online stores. Once targets are identified, further investigation can be conducted to determine exactly who the entity is behind the sale. If the entity is in a foreign country, counsel with expertise in that jurisdiction can be consulted to discuss investigation possibilities or seizure opportunities.

In both the U.S. and abroad, a cease and desist letter sent to a target is frequently useful. The letter serves three main functions. First it may cause some sellers to immediately stop their sales. Second, it puts the seller on notice that they are selling counterfeit goods effectively preventing the seller from claiming they lack knowledge of the fakes. Knowledge is a key element of most criminal statutes and also can allow for increased damage awards in civil actions. Third, the letter serves as a mechanism to collect more data from the sellers who will often eagerly provide information as to how and from whom they have sourced their products often in exchange for resolving the matter with the brand owner.

Once the field of targets is narrowed, test buys can be made (a single test buy or multiple test buys can be made both before and/or after a cease and desist letter is sent). A product received should be examined to confirm that it is in fact counterfeit. The shipping data and other information supplied by the seller will add to your intelligence and will inform your next move, which can include possibly referring the matter to law enforcement or the filing of a civil enforcement action.

An effective anti-counterfeiting program should always involve a way to meticulously collect and keep track of seller data. As patterns are revealed in this data the best targets rise to the top allowing a brand owner to focus resources only on those counterfeiters causing the most damage to the brand.

James Shore

James Shore, a partner at Sideman and Bancroft and a former career prosecutor, specializes in the protection of intellectual property rights and the implementation of...